Dalhousie Journal of Legal Studies


Crowdfunding represents a successful grassroots response to the funding gap present in many independent creative projects. While it traditionally operates on the basis of donations and rewards, the Ontario Securities Commission (OSC) has proposed implementing equity crowdfunding, which would permit the online sale of corporate securities to retail investors. This paper posits that equity crowdfunding should be adopted in Ontario. The ensuing growth in capital markets will ultimately benefit the Canadian economy and, in particular, the entertainment sector. The OSC’s proposed regulatory framework for a crowdfunding prospectus exemption is a step in the right direction. The streamlined process makes it easier and less expensive for early-stage businesses to raise muchneeded capital. The Internet’s global reach serves to match entrepreneurs and prospective investors with unprecedented ease. These reduced barriers create opportunities to kick-start the economy. The anonymity and ubiquity of the Internet make it equally important to provide sufficient investor protection. The OSC’s proposal does this in a number of ways: initial and continuous disclosure, modest investment limits, risk acknowledgement, and regulatory oversight. However, the OSC should also consider implementing a statutory action for continuous disclosure misrepresentation. The investment model of crowdfunding preserves the democratic spirit and accessibility that are essential to this funding mechanism. A case study demonstrates how this model may also benefit large capital-intensive projects in the entertainment industry

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.